The Arauco particleboard mill in St. Stephen, N.B., is set to lay off as many as 75 employees, Global News has learned.
The company says it plans to lay off between 65 and 75 people when it closes its particleboard division on Dec. 13, 2019.
The St. Stephen facility employs approximately 250 people and has been a major employer in the town for the last 60 years.
Mayor Allan MacEachern — who worked at the mill for 12 years — told Global News on Wednesday that the layoffs will be felt throughout the St. Stephen.
“We’re talking 60 to 75 people in our county that are high paying jobs, good quality jobs in your area so there’s going to be a big impact. And that’s only part of it. You got all the truck drivers hauling material in and out of that mill and you’ve got the material that gets sold to the mill,” he said.
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Arauco makes particle and medium-density fibreboard products that are used to build cabinets and furniture and will continue to manufacture Fibrex from the St. Stephen location.
“This was not an easy decision to make and is in no way reflective of the quality of local operations in St. Stephen. It is a decision based on the economics of our business and the changing nature of the industry,” said Kelly Shotbolt, outgoing president of Arauco North America, in a statement issued Wednesday afternoon.
“We know this is difficult news for all of us but we are committed to supporting our employees and their families during this transition.”
The company is offering voluntary severance and early retirement packages to all of its employees in St. Stephen.
Those programs will be available until Sept. 6, 2019.
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Flakeboard Company Ltd. operated the St. Stephen plant until 2012, when it was purchased by Arauco as part of a $250-million deal.
Arauco told Global News that its decision was caused by the high costs of natural gas and electricity, distance from market and “overall lack of demand owing to increased competition from newer and larger facilities.”
New Brunswick Labour Minister Trevor Holder says the province needs to do more to encourage a healthy business environment or else risk losing more jobs.
“This doesn’t have to be this way,” said Holder.
“We need to make sure we’re creating a competitive environment from a taxation standpoint, and from an energy standpoint and it’s a signal to the opposition parties in this province that they need to get their head out of the sand and start working with us”
Arauco says that particleboard operations in St. Stephen will be closed until Monday, Aug. 26, in order to “allow impacted employees time to process the news.”
In a tweet on Wednesday, Premier Blaine Higgs said his thoughts are with those affected by the layoffs.
“Our team assembled early this morning to determine the best course of action to assist those affected & support the community,” Higgs wrote.
More to come.